SNOW Rides on Enterprise AI Adoption: Can the Growth Continue?

Snowflake SNOW is benefiting from the accelerating adoption of enterprise AI, which is increasingly becoming a cornerstone of its growth strategy. The company is hugely developer-friendly, which makes the platform attractive for users. 

The company’s AI Data Cloud is designed to empower enterprises to leverage data and AI for faster innovation and operational efficiency. In the second quarter of fiscal 2026, nearly 50% of new customer logos were influenced by AI, and 25% of all deployed use cases involved AI. With more than 6,100 accounts using Snowflake’s AI capabilities weekly, the company is solidifying its position as a leader in the enterprise AI space.

Snowflake’s growth is evident in its financial performance. In the second quarter of 2025, the company achieved $1.09 billion in product revenues, marking 32% year-over-year growth. It also boasts a 125% net revenue retention rate, indicating strong customer loyalty and expansion. The number of customers with trailing 12-month product revenues exceeding $1 million grew 30% to 654, while total customers increased 19% to 12,062.

Snowflake’s expanding portfolio has been noteworthy. Products like Apache Iceberg and Hybrid tables, Polaris, Cortex Large Language Model, and ML functions are helping Snowflake win new clients. The company’s rich partner base that includes the likes of NVIDIA, Amazon, Microsoft, ServiceNow, and Meta Platforms is noteworthy.

Snowflake Suffers From Stiff Competition

Snowflake is facing stiff competition from the likes of Salesforce CRM and ServiceNow NOW, which are also expanding their presence in enterprise-grade AI workflows.

ServiceNow is benefiting from the rising adoption of workflows by enterprises undergoing digital transformation. In the second quarter of 2025, ServiceNow had 11 deals greater than $5 million in net new annual contract value (ACV) and closed 89 deals greater than $1 million in net new ACV.

Salesforce is benefiting from AI-powered enterprise solutions, which could serve as a major revenue driver and strengthen its position in the market. Salesforce recently introduced new MuleSoft AI capabilities, including support for Model Context Protocol and Agent2Agent, to enable secure, scalable AI agent orchestration, along with generative AI development tools to accelerate integration and multi-agent workflow deployment.

SNOW’s Share Price Performance, Valuation, and Estimates

Snowflake shares have appreciated 43.8% year to date, outperforming the broader Zacks Computer & Technology sector’s return of 19.8% and the Zacks Internet Software industry’s appreciation of 24.1%.

SNOW Stock Performance

Snowflake stock is trading at a premium, with a forward 12-month Price/Sales of 14.34X compared with the industry’s 5.87X. SNOW has a Value Score of F.

Price/Sales (F12M)

The consensus mark for SNOW’s fiscal 2026 earnings is pegged at $1.17 per share, which has increased 8.54% over the past 30 days. The figure indicates a 40.96% increase year over year. 

Snowflake Inc. Price and Consensus

Snowflake Inc. price-consensus-chart | Snowflake Inc. Quote

Snowflake currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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